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It's Tax Preparation Time!!!

Posted on January 29, 2014 at 2:05 AM Comments comments (2)
  Wow, Where did the month go? First it was HAPPY NEW YEAR, and now it's almost the end of January 2014.Now,that the Holiday Season is far behind us, the month of January provides a welcome breather for busy schedules, but hold on, before you spend all your free time sprawling on your sofa, it's time to take a jump start on filing your taxes.

This is the time to gather your W2s, 1099s, Other Earned Income Statements, Contribution Statements, Receipts, Bank Statements and other important documentation, so even though the IRS states that Tax Filing will begin on January 31st 2014, because it needs extra time to ensure that the systems are in place and working properly, We still need to get ready and prepare ourselves.

   We want to give you some tips on what to look out for as you get ready to file your taxes. We all know, that there are some New Tax Filing changes:

  • Look for Every Possible Deduction: Some of the most commonly overlooked ones are charitable contributions, Student Loan Interest, Job Hunting Costs and State Taxes Paid last year.
                   -  It is worthy to note that many credits and deductions for Education were extended for 2013 returns, among which is the American Opportunity Credit, which is up to $2,500.

                  -  The Personal Exemption is $3,900; Standard Deduction is $12,200 for Married Tax Payers filing jointly, $6,100 for Singles and $8,950 for Heads of Households.

                  -  Tax Payers will still be able to deduct their medical expenses, but it will be more difficult for many to qualify. The threshold for deducting Medical Expenses now stands at 10% of adjusted Gross Income, which is up from 7.5 percent.

                  - Among the other changes, Tax Payers who work at home will now have a simplified option for taking a Home Office Deduction. Starting with 2013 returns, if you are eligible for this deduction, you can take a Standard Deduction of $5 per Square foot, up to 300 Square Feet. The Maximum Deduction using this method is $1,500.

                   - The Deduction for Business Use of a Car has also been simplified; you can use your actual costs or the IRS mileage rates. The standard mileage rate for Business Use of a Car in 2013 is 56.5 cents a mile, up from 55.5 cents.

                  - If you made Energy Efficiency improvements to your Home, such as Installing New Windows or a Qualifying Furnace or Heat Pump, you might be able to take an energy credit of 10% of the cost up to a lifetime maximum of $500,hence of the total, the IRS states "Only $200 can be for Windows,$50 for any Advanced Air Circulating Fan,$150 for any Qualified Natural Gas, Propane or Oil Furnace or $300 for any Item of Energy Efficient Building Property.

  •    Rapid Refunds: If you expect a Refund, the earlier you file, the earlier you will typically receive it. Using the refund to pay off interest-bearing debt is even more of a Plus.

  •   Planning Ahead: For those who owe taxes, earlier filing means more time to budget and set aside what will be due. Even if you file early, you still have until April 15th to submit your Payment.

  •    Double Check: If you prepare your own return, Completing it before the Deadline provides ample time to check and double-check your work to ensure that everything is correct before you file.

  •    Ensure that your Social Security/ Numbers/Individual Taxpayer Identification Numbers (ITIN) are entered correctly and the returns are signed. Those who feel that they need more time can apply for extension, until October 15th, but if you do file for an extension, remember to estimate and Pay any Taxes Due or you will face possible Penalty.

             We hope that these tips will guide and help you in your Tax preparations, Do you Need Help in checking your Reports and ensuring that everything is entered correctly and adequately reconciled? Do you Need Help in getting your Charitable Contributions ready? Do you Need Help in ensuring that all your Receipts and Invoices are correctly accounted for into your system, Remember that the more accurate your transactions are, the more deductions you can claim and invariably, the more accurate your Tax Returns will be.

         Why Don't you give us a call on 202.422.4586 or Email Us, to see how we can further assist you. We would love to hear from you.       
                 
      
                  

Assessing your Company's Financial Health.

Posted on October 1, 2013 at 3:20 AM Comments comments (12)
                       
   Recently, A Client of ours requested to know the health of his company and was of the opinion that the total income, that his company made was enough to prove that his company was healthy. We had to explain to him, that the company's total income was not enough to show the financial health of his company. We realize that a lot of business owners always make this wrong assumption. We hope that by the time, you finish reading this article, you will have a better understanding of how to assess your business/organization's financial health position.
 
   It is important to note that, to assess your company's financial health, you will need more information than your Gross Income, to see how well your business/organization is doing. There are three important financial information, that you will need and these will also help you in making your Business decisions. They are:
 
  • Balance Sheet-A Balance Sheet provides an instant picture of an organization's financial situation at a particular point in time. It shows an organization's assets(what it owns),liabilities(what it owes) and net worth(the difference between the two).It also provides a breakdown of current assets and fixed assets, as well as current liabilities and fixed liabilities. The Balance sheet also shows how much equity(ownership interest),that you have in the Business.
 
  • Profit & Loss Statement - A Profit & Loss Statement shows all actual income and expenses incurred for a particular period of time, such as a month, quarter or year. This statement reports the most important numbers of the organization, like the Company's Gross Profit, total expenses and Net Income, through which Business owners can determine, if their business is making a profit or loss.
 
  • Cash Flow Statement - This Statement shows how much actual cash enters and leaves your company's accounts for a time period,including all operating activities, investing activities and financing activities. Incoming Cash appears in different categories, such as Sales, Cash from Vendors, interest received, Owner contributions, any borrowed money or miscellaneous sources. The categories for outgoing cash are Payroll, inventory, operating expenses, equipments, capital expenditures, debts and distributions to owners.
 
    It is important to note that by combining these three statements, you will be able to assess the financial health of your company at any given time. Please note that you NEED to have a GOOD BOOKKEEPING SYSTEM in place, because this is the only way that your statements can be accurate, and with this, you will be able to make accurate business decisions.
 
  If you need help with assessing the financial health of your business/organization's and also  preparing any of the statements listed above, We are available to help you out. GIVE US A CALL TODAY ON 202-422-4586,and see how we can assist you. We will also give you suggestions, that will enhance your business and help your company grow.
 
   Please also feel free to fill out our contact form, so that we can get in touch with you and respond to your questions. We will love to help you.
 
    
    
 
               
 
       
 

How do you value your Finances?

Posted on June 19, 2013 at 2:07 AM Comments comments (2)
 
Recently, I was discussing with a friend, who was competing with her sister in selling their hand made beads. The conversation was about raising her prices from ten cents to twenty five cents per bead. I asked her what she needed to achieve from the increase and what areas of her life, that she feels the increase will make an impact, hence asking her the five most important things that matters to her in life.
 
She thought about it, looked at me and said in this order: “First, My Family, then My House, Television, Candy and then Money”. Impressed that she had come up with exactly five items, I probed a little deeper.
 
“Mary, what do you need to get the candy that you love?’
 
“Money”, she said.
 
“And how about the TV, what do you need to get that?”
 
“Money”
 
“And how about your house?”
 
“Money”, she replied once again.
 
 And then I asked, “How about your family, what do you need to get them?”
 
Just as quickly, she replied, “Love”
 
“That’s right, “I said, but don’t you think that maybe you have to reorder your list? You see, if you need money to buy the candy, the house and the TV, then don’t you think money should be more important than what it can buy?
 
In that instance, she thought about it and said, I was right, and within that short period, I introduced her to the law of money, a law that serves as the foundation for wise spending.
 
THE LAW OF MONEY: PEOPLE FIRST.THEN MONEY.THEN THINGS
 
You see, most of us are just like Mary, we value things more than we value money. We care more about having what money can buy than we care about having money itself. When we follow the law of money, we will find out that, we are respectful of money, and if we follow it and keep what we have and spend, it will make us truly rich. We will analyze each category:
 
  •      PEOPLE FIRST: We should always prioritize everything that is created by love, which include our Family, Friends, Partners, Children and Ourselves. The saying that goes that Money can’t buy love is true, and a life without love –regardless of how much money one has-is a poor life indeed.
 
  •       THEN MONEY: Can you imagine going to someone’s  house and having them proudly show you a room filled with thousands of dollar bills and telling you the history of how all that money came to be? You will be amazed at all that vulgarity, but at the same time, you will think nothing of it, when you compare it to another person's home that is filled with beautiful decorations, What did it take to decorate the home? Money. Money exchanged for furniture, paintings, carpeting, lamps and so on.
 
The difference in your perception is the VALUE SYSTEM that you applied- A Room filled with things is okay, whereas a room full of money is not.
 
 
  •        THEN THINGS: When your financial priorities are in order; things come last.
 
     In conclusion, when we work hard for our money, maybe forty hours or more a week and then go shopping, buy food, clothes and stuff, we usually say that we don’t know where the money went. This is also applicable, when we pay for services, that we really need; but why don't you consider this- CHANGE your perspective now, if we valued money over things and over items it can buy, then we would know exactly where our finance is going.
 
We should change our money/thing ratio, so that we will have more money than things, this will also encourage us to take great pleasure in seeing our money and watching it grow. With this approach, we would always know when we can afford something that we need and will be more likely to be able to buy the things we TRULY WANT to make us happy.
 
So next time, you go out to spend money, always remember that you are not throwing the money away, but you are exchanging it for something that has a value to you.
 
Please feel free to give us a call today to get your finances organized, so that you can capture where your expenses are going and invariably increase the value you need for the important areas in your life.